Disclaimer
The information in this presentation does not constitute an offer
to sell or an invitation to buy shares in George Wimpey Plc or
any other invitation or inducement to engage in investment
activities.
Past performance cannot be relied upon as a guide to future
performance
2
George Wimpey PlcInterim Resultsfor the 26 weeks to 3 July 2005
Tuesday 6 September 2005
Welcome
John Robinson
Chairman
Agenda
H1 Financial Review Andrew Carr-Locke
UK Business Review Pete Redfern
US Business Review Peter Johnson
Strategy and Outlook Peter Johnson
5
H1 2005 financial review
Andrew Carr-Locke
Group Finance Director
IAS reconciliationIncome statement
7
156.5158.0 181.8181.6
(34.2)(27.3) (27.9)(23.1)
122.3130.7 153.9158.5
(37.9)(41.0) (47.8)(49.1)
84.489.7 106.1109.4
Operating profit
Interest
PBT
Tax
Profit after tax
IASUK GAAP* IASUK GAAP*
H1 2005 H1 2004£m
*Consistent 2004 UK GAAP basis
First half results
*restated for IAS **last 12 months
Turnover 1,190 -2%1,220
Operating profit 156.5 -14%181.8
Interest charge (34.2) +23%(27.9)
Profit before tax 122.3 -21%153.9
Earnings per share 21.5p -22%27.7p
NAV per share 348p +52p296p
Dividend per share 5.7p +10%5.2p
ROACE** 22.7% 25.6%
H12005
ChangeH1
2004*£m
8
Segmental analysis
*Exchange rate in 2005 $/£=1.87, 2004 $/£=1.81
GWUK 858 -10% 107 -32% 12.4% 16.4%
Morrison Homes* 332 +24% 55 +64% 16.4% 12.4%
Other - - (5) -
Total 1,190 -2% 157 -14%
£m Change £m ChangeH1
2005H1
2004
TurnoverOperating
profit Operating
margin
9
First half completions
4,154 -11% £194,000 -GWUK private
422 -6% £88,000 +2%GWUK affordable
4,576 -10% £185,000 -GWUK
1,996 +16% $302,000 +9%Morrison Homes
6,572 -3%GROUP TOTAL
No Change £ / $ Change
Completions Ave selling price
10
Cash flow summary
*restated for IAS
H12004*
H1 2005£m
Operating profit
Land spend
Land realisations
Other working capital movements
CASH INFLOW FROM OPERATIONS
182157
(462)(502)
284284
(137)(134)
(133)(195)
Tax
Dividends
Exchange rate effects
Other movements
INCREASE IN NET DEBT
(55)(55)
(16)(41)
5(31)
(3)(11)
(225)(360)
Interest (23)(27)
11
Balance sheet - net assets
30 Jun2004*
3 Jul2005
Fixed assets and joint ventures
Land
Land creditors
Other net operating assets
Tax and provisions
Net pension deficit
TOTAL NET ASSETS EMPLOYED
2945
1,7672,136
(147)(240)
451546
(63)(94)
(129)(145)
1,9082,248
£m
* restated for IAS 12
Balance sheet -financing
* restated for IAS
Shareholders’ funds £m 1,367 1,154
3 Jul2005
30 June2004*
Net debt £m 881 754
Capital employed £m 2,248 1,908
Gearing 64% 65%
Interest cover last 12 months 7.1x 7.6x
Cash interest cover last 12 months 9.4x 9.8x
13
Financial summary
Results now published under IAS
Challenging market conditions in the UK
GWUK margins down 4.0pp, volumes down 10%
Continued strength in the US
Morrison margins up 4.0pp, volumes up 16%
Group PBT down 21% at £122m
Gearing in line with prior year at 64%
ROCE at 22.7% remains healthily above cost of capital
Half year dividend increased by 10% to 5.7p 14
Impact of IASInterest charge – net payable
H1 2005£m H1 2004
UK GAAP basis*
Interest charge on discountedpension liabilities under IAS 19
Reallocate JV interest
Interest charge ondiscounted land creditors
Notional interest expensebooked to cost of inventory
Movement on interestrate derivatives
IAS basis
(27.3) (23.1)
(4.2) (4.0)
0.6 -
(3.1) (1.4)
1.1 0.6
(1.3) -
(34.2) (27.9)
15*Consistent 2004 UK GAAP basis
Financial summary
Results now published under IAS
Challenging market conditions in the UK
GWUK margins down 4.0pp, volumes down 10%
Continued strength in the US
Morrison margins up 4.0pp, volumes up 16%
Group PBT down 21% at £122m
Gearing in line with prior year at 64%
ROCE at 22.7% remains healthily above cost of capital
Half year dividend increased by 10% to 5.7p 16
UK business review
Pete Redfern
Chief Executive, GWUK
Financial summary
Total completions
Private completions
Private ASP
Turnover £m
Gross margin %
4,177 4,560 399 533
3,793 4,220 361 423
£182,900 £183,600 £316,400 £308,100
739.3 809.3 119.1 142.9
24.3% 26.8% 20.3% 23.1%
George Wimpey
H1 2005 H1 2004 H1 2005 H1 2004
Laing Homes
Operating profit £m
Operating margin %
106.7 156.2
12.4% 16.4%
GWUKH1 2005 H1 2004*
* restated for IAS18
UK market conditions
Market continues to be
tough but steady
very price sensitive and incentive led
Second hand market (down 30%) affecting new build sales and
conversion rates.
Summer visitor levels are slightly better than last year
cancellation rates below peak in November 2004
Geographically no clear difference in market conditions,
in the South slightly more confidence in the short term
Apartment market is particularly price sensitive - occupier and investor
19
Ave weekly sales ratesGWUK 2003 – 2005
0
0.2
0.4
0.6
0.8
1
1.2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2003 2004 2005
Sal
es p
er s
ite
per
wee
k
20
Net sales prices on reservationsGWUK 2003 – 2005
140
150
160
170
180
190
200
210
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2003 2004 2005
AS
P a
chie
ved
on
res
erva
tio
ns
£000
s
21
Price points
0
200
400
600
800
1000
1200
1400
£0-50k £51-100k £101-150k £151-200k £201-250k £251-300k £301-500k £500k+
Price band
2005
2004
To
tal c
om
ple
tio
ns
22
Product mix
Apartments
2 / 3 bed houses
4 / 5 bed houses
H12005
H22004
H12004
34% 29% 32%
32% 29% 35%
34% 42% 33%
100% 100% 100%
PD completions %
23
Margin reconciliation
100% 100% 100%-Turnover
26.5% 23.9% 24.2%(2.6)%Land costs
49.7% 49.7% 49.5%0.0%Build & other costs
4.7% 3.8% 3.3%(0.9)%Direct selling expenses
6.6% 6.1% 5.2%(0.5)%Overhead costs
12.4% 16.4% 17.8%(4.0)%Operating profit
ChangeH1 2005 H1 2004 FY 2004
24
Build Costs
Underlying cost pressures remain, pressure on labour rates
and availability has reduced
Material cost pressure remains high, driven by higher energy
and other input costs, partly balanced by scale
Cost management program enabled us to hold build costs
Confident of £20m cost saving program, c.£17m impacts on
2005 with much of the balance locked up in WIP and build
Key initiative is rationalisation of house typesSeptember 2004 - every business had own house designs
no core national range since 2001
today - a ‘preferred range’ of 30 products 25
Landbank
North
Midlands
South
City
Laing
TOTAL
15,555
12,360
6,258
16,648
3,559
54,380
4,784
5,329
-
6,218
-
16,331
Jun 2005 Jun 2004 Jun 2005 Jun 2004
Owned andcontrolled plots
Long term acres
15,630
12,147
4,648
16,078
2,398
50,901
4,908
5,497
-
7,720
-
18,125
26
Planning approvals achieved on 14,500 plots in last 12 months
Land cost
Cost per plot of 2005 acquisitions is higher due to Laing / South
mix
Continued focus on larger sites where competition slightly
reduced and scale gives advantage
Significant skills developed since 2003 on partnership schemes
like Bracknell and Dartford
ASP £000s
Cost per plot £000s
H1 2005 Landbank
Land value % ASP
194.5 194.3
52.3 54.0
26.6% 27.8%
For PD ownedplots only
27
Bracknell case study
Existing planning consent - 584 PD units, 146 affordable unitsPhased land payment terms, above standard gross marginPursuing enhanced planning application, including 38% affordable
provisionc.£260k average selling price
Mix includes
c.20% 1&2 bed apartments
2-5 bed houses
EcoHomes ‘Very Good’
Anticipated site start Feb 06 based on existing consent
28
Dartford case study
794 private development units, 340 affordable unitsPhased land payment terms, above standard gross margin39% apartments across the developmentc.£230k average selling price
Design codes for integrated mixed use developmentLand acquired fully serviced
‘Fastrack’ - dedicated
transport service
Anticipated site start mid 06
29
Summary
Challenging first half
market tough, use of incentives essential
order book at 90% of expected full year volumes, margins
below first half
build cost pressures significant but balanced by savings
Outlook for H2
early to call autumn market
balance between customer demand and supply availability is
critical factor
cost pressures remain but mitigated by savings
operating margins improved by volume weighting30
US business review
Peter Johnson
Group Chief Executive
US housing marketcontinued healthy economic data…
Employment
240,000+ new jobs in July, 169,000 in August
unemployment at four-year low
Consumer confidence
up to 105.6 in August (vs. 106.2 max 2004 and 2005)
30-year mortgage rates
5.71% - still near record lows
32
US housing marketunderpinned by demographics
Source: CSFB
70.0
69.268.6
68.368.067.5
66.966.4
65.765.4
65.1
64.164.064.164.163.9
62%
63%
64%
65%
66%
67%
68%
69%
70%
71%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2010E
A homeownership rate of 70% in 2010 would imply the creation of
c.1.28m households pa from 2004-2010, compared to the 800,000
created pa from 1999-2004
US Homeownership rates
33
Morrison HomesH1 performance
More outlets open in continuing businesses
1 Jan = 89 outlets 1 Sep = 98 outlets
Visitor rates per site
Ave selling price
Sales rates per site
H1 2004H1 2005 Change
18.219.6 +8%
$278,000$302,000 +9%
1.081.15 +6%
34
Financial summary
Legal completions
Revenue $m
Ave selling price
Operating profit $m
Operating margin %
H1 2004*H1 2005 Change
1,7141,996 +16%
484621 +28%
$278,000$302,000 +9%
60.3101.9 +69%
12.4%16.4% +4.0pp
* restated for IAS35
Margin performance
Margins above these levels in sales proceedingImplied operating margin LPEs year to date = 16.5%
H1 cost inflation c.7% annualised (Source: CSFB)Some labour and material shortages in strongest markets
Gross margin
Operating margin
27.1%
16.4%
24.0%
12.4%
H1 2005 H1 2004
+3.1pp
+4.0pp
Change
36
Land
Land in place for growth in 2006 and largely in place for 2007Good regional balance
Plots owned / under option
Plots controlled
Total landbank
19,661
3,058
22,719
18,892
2,687
21,579
17,456
2,606
20,062
Jun 05 Dec 04 Jun 04
Net additions (plots, last 6 months)
Land spend $m (last 6 months)
2,765
156
4,144
174
3,866
108
37
Progress on strategy:four platforms for growth
Focus on growing markets
major beneficiaries of underlying trends
Establish satellites in neighbouring markets
land in place to support 2006 growth in Reno, Ft Myers and
Daytona Beach
Product development
continued success of townhome product
Performance improvement in Texas and exit from Atlanta
Texas completions + sales proceeding up 53% in H1
Atlanta exit largely complete 38
Morrison Homes marketsmajor beneficiaries of underlying trends
California
Florida
Texas
Arizona
Colorado
TOTAL
Total US
Morrison Markets
321
262
185
116
58
941
2,947
32%
1
2
3
6
18
-
JobGrowth
last 12 mths
Rank
104
106
82
43
21
355
887
40%
2
1
3
6
12
-
SFPermitsH1 2005
Rank000s
39
Morrison Homes marketsmajor beneficiaries of underlying trends
California
Florida
Texas
Arizona
Colorado
TOTAL
Total US
Morrison Markets
321
262
185
116
58
941
2,947
32%
1
2
3
6
18
-
JobGrowth
last 12 mths
Rank
104
106
82
43
21
355
887
40%
2
1
3
6
12
-
SFPermitsH1 2005
Rank000s
1,004
1,954
780
528
184
4,450
Morrisoncompletions
last 12 mths
40
Progress on strategy:four platforms for growth
Focus on growing markets
major beneficiaries of underlying trends
Establish satellites in neighbouring markets
land in place to support 2006 growth in Reno, Ft Myers and
Daytona Beach
Product development
continued success of townhome product
Performance improvement in Texas and exit from Atlanta
Texas completions + sales proceeding up 53% in H1
Atlanta exit largely complete 41
Summary
Excellent first half performance
visitor levels, sales rates, selling prices all up
Strongly placed for second half
94% sold or completed for 2005
order book margins and prices above first half
volumes may be held back by materials shortages
Well-positioned for continued growth
land already in place to support continuing volume growth in
2006 and largely in place for 2007
42
Strategy and outlook
Peter Johnson
Group Chief Executive
Strategy Market background
UK
underpinned by continuing supply shortfall
price growth likely to be limited
opportunities at lower price points
US
underpinned by demographics and economy
remains strong with wide regional variations
will come off peak but remain at historically high levels
44
Strategy
UK - focus remains on volume growth
plans in place to deliver through
expanding existing regions
new Laing regions
new George Wimpey satellitesGovernment initiatives offer potential for new businessimplementation depends on market and land prices
US - sustained volume growth
“four platforms” growth plan in placeland and detailed business plans in place to support growththese plans could deliver 10,000 unit business within 5 years
45
Outlook
UKcurrent sales rates ahead of same period 2004premature to draw conclusions on autumn marketif sales rates sustained, full year total volumes similar to 2004 by 1 September 90% completed or in order book margins in order book below first half actuals
USvisitor and sales rates remaining strongfull year volumes still expected to be up c.10% small volume risk from materials and labour shortagesby 1 September 94% completed or in order bookmargins and prices in order book above first half actuals
46
George Wimpey PlcInterim Resultsfor the 26 weeks to 3 July 2005
APPENDIX
Impact of IASBalance sheet
48
45 44 29 29
2,136 2,143 1,767 1,771
(240) (244) (147) (151)
547 544 451 452
(94) (103) (63) (69)
Fixed assets & JVs
Land
Land creditors
Other current assets*
Tax & provisions
IAS UK GAAP IAS UK GAAP
H1 2005 H1 2004
(145) - (129) -Net pension deficit / SSAP 24 prepaid
2,248 2,384 1,908 2,032TOTAL NET ASSETS EMPLOYED
£m
*Primarily elimination of interim dividend for IAS
Group reservations
GWUK private
GWUK affordable
GWUK TOTAL
US TOTAL
GROUP TOTAL
5,936
1,201
7,137
2,804
9,941
6,641
835
7,476
2,932
10,408
321
-
321
93
414
294
-
294
104
398
0.71
-
-
1.16
-
0.87
-
-
1.08
-
H12005
H12004
Reservations Ave sites Per outlet /per week
H12005
H12004
H12005
H12004
49
H12005
H12004
H22004
2004full year
GWUK -turnover analysis
Private - volume
ave price £000s
4,154 4,643 6,631 11,274
194.5 194.9 192.4 193.5
turnover £m 808 905 1,276 2,181
Affordable - volume
ave price £000s
422 450 508 958
87.7 85.9 92.5 89.8
turnover £m 37 39 47 86
Other turnover 13 8 26 34
TOTAL £m 858 952 1,349 2,30150
GWUK - margin analysis
Gross profit £m
Gross margin %
Selling expenses £m
Overhead costs £m
OPERATING PROFIT £m
Operating margin %
203.7
23.7%
(40.5)
(56.5)
106.7
12.4%
250.0
26.2%
(36.2)
(57.6)
156.2
16.4%
352.8
26.1%
(39.8)
(59.4)
253.6
18.8%
602.8
26.2%
(76.0)
(117.0)
409.8
17.8%
H12005
H12004*
H22004*
2004full year*
51* restated for IAS
GWUK -PD product mix
H12005
H22004
H12004
2004full year
Apartments
2 / 3 bed houses
34% 29% 32% 31%
32% 29% 35% 32%
4 / 5 bed houses 34% 42% 33% 37%
100 100 100 100
Completions %
52
GWUK -PD price mix
£0 – 50k 0 8
£51 – 100k 162 344
£101 – 150k 1250 1332
£151 – 200k 1325 1400
£201 – 250k 792 831
£251 – 300k 311 323
£301 – 500k 268 357
£500k + 46 48
H1 2005 H1 2004
Total 4,154 4,643
0%
4%
30%
32%
19%
8%
6%
1%
100%
0%
7%
29%
30%
18%
7%
8%
1%
100%
Completions % Completions %
53
GWUK -PD activity analysis
Ave house size sqft
Ave selling price £ / sqft
H12004
2004full year
1,069 1,033
182 187
H22004
1,008
190
H12005
1,015
192
54
GWUK -PD geographic mix
Legals
H1 2005 H1 2004
LegalsSizesqft
ASP£000
Sizesqft
ASP£000
Legals
H2 2004
Sizesqft
ASP£000
North
Midlands
South
Laing
1,205 1,084 172 1,459 1,150 169
1,307 979 168 1,593 1,033 173
1,202 970 206 1,055 1,036 212
361 1,129 316 423 1,088 308
2,123 1,095 171
1,983 953 166
1,843 958 204
506 1,149 329
City 79 713 242 113 776 267 176 699 237
Total 4,154 1,015 195 4,643 1,069 195 6,631 1,008 192
55
GWUK -landbank by region
Owned andcontrolled plots
June2005
June2004
Long term acres
June2005
June2004
North
Midlands
South
Laing
15,555 15,630
12,360 12,147
16,648 16,078
6,258 4,648
4,784 4,908
5,329 5,497
6,218 7,720
- -
City 3,559 2,398 - -
Total 54,380 50,901 16,331 18,125
56
GWUK -short term land
H12005
H12004
H22004
2004full year
OWNED - Start of period
Net additions
37,222 33,559 34,191 33,559
7,138 5,725 10,170 15,895
Legal completions (4,576) (5,093) (7,139) (12,232)
End of period
CONTROLLED
39,784 34,191 37,222 37,222
14,596 16,710 13,897 13,897
TOTAL LANDBANK 54,380 50,901 51,119 51,119
57
GWUK -owned land
Plots
H1 2004 H1 2005
PlotsCost perplot £k
Value£m
Opening landbank 33,559 44.6 1,49737,222 45.6 1,698
Additions 5,725 47.6 2727,138 52.3 373
Completions (5,093) (44.6) (227)(4,576) (47.9) (219)
End of period 34,191 45.1 1,54239,784 46.6 1,852
Short term Cost perplot £k
Value£m
Long term Acres Value £mAcres Value £m
End of period 18,125 6116,331 49
58
H12005
H12004
H22004
2004full year
Morrison Homes -turnover analysis
Volume
Ave selling price $000s
1,996 1,714 2,708 4,422
302 278 296 289
Turnover $m 603 476 801 1,277
Other turnover 18 8 5 13
TOTAL $m 621 484 806 1,290
59
Morrison Homes - margin analysis
Gross profit $m
Gross margin %
Selling expenses $m
Overhead costs $m
OPERATING PROFIT $m
Operating margin %
168.3
27.1%
(31.6)
(34.8)
101.9
16.4%
116.4
24.0%
(26.7)
(29.4)
60.3
12.4%
200.5
24.9%
(37.3)
(35.2)
128.0
15.9%
316.9
24.6%
(64.0)
(64.6)
188.3
14.6%
H12005
H12004*
H22004*
2004full year*
60* restated for IAS
Morrison Homes -price mix
$0 – 200k 390 344
$201 – 250k 395 442
$251 – 300k 332 318
$301 – 350k 265 281
$351 – 400k 215 190
$401 – 450k 172 75
$451 – 500k 128 20
$500k + 99 44
H1 2005 H1 2004
Total 1,996 1,714
19%
20%
17%
13%
11%
9%
6%
5%
100%
20%
26%
19%
16%
11%
4%
1%
3%
100%
Completions % Completions %
61
Morrison Homes -activity analysis
Ave house size sqft
Ave selling price $ / sqft
H12004
2004full year
2,409 2,386
115 121
H22004
2,371
125
H12005
2,322
130
62
Morrison Homes -geographic mix
H12005
H12004
H22004
2004full year
West
Southeast
460 402 728 1,130
932 816 1,276 2,092
Southwest 604 496 704 1,200
TOTAL 1,996 1,714 2,708 4,422
West
Southeast
428 372 413 398
282 260 263 262
Southwest 237 231 234 233
TOTAL 302 278 296 289
Average selling price
Completions
63
Morrison Homes - regional performance
Turnover
H1 2005$m
H1 2004$m
153204
215266
117149
-2
West
Southeast
Southwest
Corporate
Total 484621
H1 2005$m
H1 2004$m
32.1
24.9
9.3
(6.0)
Operating profit*
60.3
Operating margin
H1 2005%
H1 2004%
21.0%
11.6%
8.0%
-
12.4%
56.5
39.2
16.8
(10.6)
101.9
27.7%
14.8%
11.3%
-
16.4%
64* restated for IAS
Morrison Homes - short term land
H12005
H12004
H22004
2004full year
Start of period
Net additions
18,892 15,304 17,456 15,304
2,765 3,866 4,144 8,010
Legal completions (1,996) (1,714) (2,708) (4,422)
End of period
End of period
19,661 17,456 18,892 18,892
3,058 2,606 2,687 2,687
TOTAL LAND BANK 22,719 20,062 21,579 21,579
LAND SPEND $m 156 108 174 282
OWNED AND OPTIONS
CONTROLLED
65